10 February 2021
Project to Boost India-UK FinTech and FinTech-Enabled Services Trade Launched
A project led by two expert teams from India and the UK will take off on Wednesday to find innovative ways to strengthen the FinTech partnership between the two economies that have a combined GDP of over USD 5 trillion. The launch of the project comes in the backdrop of the 10th India-UK Economic and Financial Dialogue (EFD), held in October last year, identifying FinTech innovation as an important area for boosting bilateral collaboration.
The India team led by Professor Sachin Chaturvedi, Director General, RIS and the UK team led by Professor Thankom Arun, Director, Centre for Accountability and Global Development (CAGD), Essex Business School, University of Essex will gather new evidence in this regard to help shape policies and strategies for enhancing India-UK trade in FinTech and FinTech-Enabled Services (FT-ES).
During the EFD, both the countries had looked at ensuring faster and cheaper flow of UK-India remittances, promoting greater connectivity between India’s Unified Payments Interface system and the UK payments system as well as greater acceptance of RuPay cards in the UK and setting up of FinTech Awards programme to encourage entrepreneurs. There is also a regulatory cooperation agreement between the RBI and the Financial Conduct Authority (FCA) of the UK for sharing information on financial services innovations.
FinTech – comprising WealthTech, Payments, Lending and InsureTech – is an emerging sector in India. As per Invest India, this sector is going to increase at a Compound Annual Growth Rate of 20.2% during 2017-2021 to reach US$92 billion. In 2020, online transactions grew by 80% as compared to 2019. India is projected to contribute 2.2% to the world’s digital payments market by 2023.
Given the potential of the sector in both the countries, Indian Council of Social Science Research (ICSSR) and Economic and Social Research Council (ESRC) from UK had, in 2019, invited joint applications for collaborative projects between Indian and UK researchers. On the basis of a competitive evaluation process, four projects were then selected.
One of those four identified projects, is a study titled “UK-India Bilateral Trade in Fintech and Fintech-Enabled Services: Emerging Trends and Potential for Growth”. It is being undertaken jointly by two teams from India and UK for three years. The India team led by Professor Chaturvedi (Principal Investigator) includes Professor K.J. Joseph, Director, Gulati Institute of Finance and Taxation (GIFT); Dr. Reji Joseph, Associate Professor, Institute for Studies in Industrial Development (ISID); and Dr. Priyadarshi Dash, Associate Professor, RIS. The UK team led by Professor Arun includes Professor Victor Murinde, Director, Centre for Global Finance, SOAS, University of London; Professor Sheri Markose, Economic Department, University of Essex; and Dr Philip Kostov, Professor, School of Business, University of Central Lancashire.
This new project will address issues pivotal to the fintech revolution. Some of the new initiatives include FinTech/silicon ecologies incubating UK-India firms for innovative financial services; funding conduits for infrastructure and green finance; regulatory frameworks to ease market access for UK-India FinTech firms. These provide fertile ground for financial innovation witnessed by the growth of the fintech sector in both countries. Besides promoting bilateral business in financial services, the project would contribute significantly to the cause of inclusive development addressing financial inclusion, digital empowerment and start-up ecosystem. Both countries have globally leading start-up ecosystems which the study aims to capture. Policy issues with respect to regulatory issues that affect their growth and contribution.
According to Professor Arun, “FinTech provides enormous opportunities for the development of financial markets and economic growth. This project aims to contribute to the ongoing India-UK EFD by contributing to the development of the FinTech sector and FT-ES and trade between India and the UK. This project has enormous potential to deepening both countries’ bilateral partnership.”
Professor Chaturvedi said: “With growing heft in technological competence in FinTech and FT-ES, the study would yield useful policy insights on development partnership. Besides strengthening bilateral relations between India and UK, the accumulated knowledge can be scaled up to share the development experience with fellow developing countries in Africa and Pacific Island economies.”
The project will have a formal launch event in March 2021.